...Is that the villain doesn't think he's the villain at all. He's the hero of his own story, and in that story, you are the villain. Think about what this person wants, why they're willing to do what they do to get it, what might have led them down this path. Behind every monster is a living, breathing person who probably didn't just wake up one morning and go, "today, I shall be evil!"

The best thing to do if you want to write good villains is to read the ever wonderful Evil Overlord List because that will never lead you wrong.
Personally, I think a villain who knows what he is doing is wrong and crazy but does it for the kicks anyways is the creepiest villain.

I'm told that villains give zero ...s about anything. Other than themselves, their goal, and/or their family, of course.

Play with the design of your character, too. The Uncanny Valley is a close ally. If the character looks just a little bit off--their skin is too smooth, for example, or they rarely ever blink--that can evoke a powerful negative response.

... mostly because there are so many different types of villain that fit better or worse depending on the narrative. A few general tips:

Some villains, like serial killers, are frightening because of who they are. Others are frightening because of what they represent, where villainy is as much carried out by their faction/minions/whatever as themselves. Note that this doesn't mean such a villain necessarily has to be some kind of behind-the-scenes puppet master- they can be significant, visible badasses in and of themselves, so long as they also represent kind of the natural pinnacle of their faction's power.

To showcase the threat of what a villain will do if not stopped, they usually have to be in a position where they have come at least partway to doing what they actually want. They don't have to have won, but for a faction it's generally a good idea for them to have controlled at least some territory, and if they have something in particular they plan to do, if it's something less final than destroying the planet or whatever (see, Omnicidal Maniac) it's usually a good idea for them to have done it successfully at at least one point prior.

Villains with strong "acting" are always a nice touch, but it's not strictly necessary. Tevos T'sael from Palaven's Dogs was just a sleazy politician with relatively little screen time, but that played to her advantage when she discusses the extermination/enslavement of the turian people just as blandly as she does her newest trade proposal.

So, ultimately, creating a villain is a very broad challenge, and without knowing more about what goes on in this game there's no easy answer. Usually, when I can't think of anything, I tend to plan out what the villain doesN/i> to move the plot forward, then see how I can use that to make them see villainous (which is how Tevos came into being, above).


Also, a side note. It seems like a lot of media these days (mostly fan, although the last Mad Max movie was also extremely guilty of this), seem to think that making a villain or villain faction ludicrously sexist is enough to make them threatening. I've always found this to be a bit of a cheap substitute for actual characterization, and it usually leaves me just sort of snorting disdainfully about how these troglodytes could possibly have made it into a position of importance as opposed to being scared or angry at them.

Depending on the title, make it true. The creepier it is, the better. For example, Ugnatt Trunn from "Lord Brocktree" by Brian Jacques had the title of "He Who Drinks Blood from the Skulls of His Enemies." Not a page after this name was first written was Trunn handed a hollowed-out weasel's skull, with blood in it, to sip. It was mostly for the image, it turned out, but still, it was creepy when you didn't know that.

Wait, you're making a video game? Awesome! I hope it goes well for you.

I don't know if I'd describe them as chilling, but personally, I really like villains that have understandable motivations but absolutely no morals. Whether their goals are noble (making the world a better place, getting revenge for the death of a loved one) or selfish (money, power), they're something the audience can recognize. But they're willing to cross the line with their behavior. Basically, the kind of villain that you can almost, but not quite, understand completely.

Also, villains who do have really clever plans. This is a little more subjective, but I'll admire a villain a lot more if he can outwit his opponents. The same's true for the heroes, too.

This may or may not get a tad opinionated. I'm not as well versed in popular media as I'd like to be but I know of some really good examples that I feel are worth sharing.

My idea of a genuinely creepy antagonist is one who knows and understands you on a personal level, or vice versa. The former because he is not only relatable to you but also knows how to well and truly ruin you, and the latter because you get the sense that this could be you, or at least someone you know. How either of these can be expressed in the character can vary depending on the writer and the audience but in general they are basically the incarnations of things that the viewer is afraid of, and those that have the potential to damage them on a personal level can be especially terrifying. Especially if they have the public backing them up. For example, my idea of a truly scary villain would play on my own fear of losing face due to exposure of my personal faults, with said character broadcasting the hero's worst secrets to the entire world and getting everyone to hate them. Or, if the reader fears being wrongfully accused by the masses, Tumblr style, the villain could spread hateful rumors among the populace with a similar result.

On the flipside, there’s also the villain who could very easily turn up in real life and affect the people around them no less differently than their fictional counterpart. That's why Dolores Umbridge is so widely hated because really, who HASN'T had at least one teacher as despicable as her? Another good starting point could be emotional manipulation in that the villain convinces the heroes that they are in the wrong, even if it's not true, which is something that happens a lot in real life as well. Again, if the character has a public reputation and following, even better, since those who admire the character could easily turn against you if you try to speak against their idol.

By the way, you don’t have to worry about projecting your own fears into a scary villain, because lots of writers do that in canon, and I know I would. The key is to make sure your audience can also relate to whatever makes your villain so frightening. In my opinion, if there's anything a good book or movie must be, it's engaging. And the same goes for the characters of these works, antagonistic or otherwise.